Chengdu’s Pilot Program to Abolish the Hukou

Chengdu recently unveiled the details of a pilot program that will unify the household registration (hukou) system, effectively abolishing the differences between urban and rural hukou.

The hukou system has become a major source of social tension in the last thirty years as rural residents have watched their urban cousins grow wealthy while they languished in poverty – major inequalities exist between rural households and urban households in terms of the benefits, subsidies, insurance and aid they receive from the state.

Chengdu migrant worker
A migrant worker surveys new constructions

The program here in Chengdu is a one-of-a-kind experiment in China to see what effects the unshackling of the populace through elimination of one’s hukou as the basis for receiving government benefits could have on poverty alleviation and social stability.

If the last 30 years are any indication of what happens when Chinese are released from bondage, then the impact of these reforms could be singularly transformative.

The Basic Chinese Social Unit

For a Chinese family, their hukou defines not only where they are from, but what class they belong to, what opportunities are open to them and how far they might be able to climb in the future.

For rural migrants – the oil that has kept the Chinese economic engine greased – the hukou is like an iron collar and a great wall wrapped into one woeful burden. In order to do anything in China, you have to produce your hukou.

If you have a rural hukou, but you are trying to get married, have children, apply for insurance, get a job, or send your kids to school in the city, it could be much more difficult for you. You might have to pay higher fees, you might not have access to that service at all and you might have to make runs back to the location of your hukou to gain approval, documents or signatures that still might not help you get what you need.

Rural officials are often much poorer (and therefore more corrupt) than their urban counterparts, so the benefits (unemployment, stats-subsidized insurance, housing allowances) are usually inadequate for anyone living in the city if they even exist at all.

If you have heard the term “floating population” before and were not exactly sure what that meant, now you know:

China hukouRural workers who left their hometown for work in the cities were technically non-persons, unable to go to school, sign contracts, rent a home, go to the hospital or any other basic service, because according to the hukou system as it was originally envisioned, a person lived, worked, played, was cared for and eventually died within spitting distance of where they registered their hukou.

The system is the quintessential tool of control in China and even though it has been de facto ignored as long as peasants kept sweeping streets or assembling keyboards, the inequality remained.

The whole nation is watching closely to see what happens over the next few years as Chengdu takes off the iron collar and breaks down the wall that kept farmers and urbanites separated for so long.

Why the Reforms?

When the Chengdu government announced their plans to unify the hukou system by 2012, they released a document, “The Unification of all Greater Municipality Hukou (Chinese),” which is a detailed account of the problems they encountered with the system and the solutions they are planning to enact.

Basically, the government studies show that rural residents have little access to government aid while urban residents enjoyed much greater access and also much greater benefits. In order to meet the demands of the “Enrich the Countryside” campaign and further the goals of the “Unifying Urban and Rural” program as well as contribute to the creation of a “Harmonious Society,” the city had to do something about all those broke, hungry and increasingly angry farmers out there with their noses pressed against the glass of the rapidly growing urban areas.

Some of the inequalities the government hopes to straighten out include the differences between medical insurance, housing benefits, unemployment benefits and education.

In the past, a farmer had a plot of land of a certain size and that was that, no matter how many children he had or how many people were in his family. Under this system, a farmer’s son would grow up without land of his own and automatically enter the ranks of the un-(or under-) employed, but with no system in place to protect him or help him find work. According to the city’s plan, by the end of 2011, urban and rural unemployment benefits will be unified and a landless farmer will be considered unemployed, thereby giving him access to urban unemployment benefits.

These employment benefits also cover discharged soldiers. Soldiers who returned to their homes in the city could expect unemployment benefits and help finding a job, but soldiers returning to a rural home were met with the same lack of help that every other farmer suffered under until these recent reforms. Under the new rules, a discharged soldier receives help no matter where he is from, unless he has land – land under the Chinese system is the equivalent of a job.

There used to be three basic types of insurance that the state offered: insurance for urban residents, retirement insurance for rural residents and insurance for rural residents working in the city. The insurance offered to rural residents was not only small, but very simple: a farmer paid a few hundred yuan per year and when he retired could expect to see 50 yuan or so a month. Urban dwellers have much more sophisticated and useful insurance programs and now with the unification of the hukou, the migrant worker insurance has been scrapped and rural residents now have access to the same insurance that urban residents have.

Farmers also had no access to government subsidies that helped urban dwellers rent or buy homes, under the new system they can apply for these benefits with their ID card, instead of their old hukou.

Migrant workers in Chengdu
Migrant workers arrive in Chengdu at the train station by the thousands carrying personal cargo

A Final Step Toward Total Urbanization

That the government would be abolishing the hukou system purely to correct inequality seems hard to swallow in today’s China. The move will also speed up urbanization, a major goal of the nation since 1979, and this is perhaps the most important consquence of hukou reform, from the government’s point of view.

If farmers flock to the cities en masse and alter their hukou status from rural to urban, that theoretically leaves the countryside open for development. Development of the countryside has been a very difficult thing to pull off, despite “Enriching the Countryside” and “Urban and Rural One Entity” campaigns, because China’s developers and local officials routinely collude to drive farmers off of their land with the least possible compensation. In order to speed up urbanization and remove the obstacle of angry farmers, local governments across China hope that eliminating the differences between rural and urban hukous will act as an attractive enough carrot to lure farmers away from their land.

But as officials in Chongqing have learned, Chinese farmers are “once bitten, twice shy”. Hukou reform in Chongqing has stalled as thousands of farmers have refused to alter their hukou status out of fear of losing their land for the smoke and mirror benefits of being a bona fide urbanite. Rural residents would rather hold on to their land and fight it out with developers (or simply plant food), than risk giving it all up, so the city has switched gears and focused on “turning” rural students into urbanites instead …

Even if the government’s plan works and farmers throw their rural hukou (and land) away and move to the city, the impact might be less than desirable. Online critics of the plan point out that under the new system, rural schools will stand empty as rural parents make a mad rush for urban schools. Another major concern of netizens who reacted to the story is the clause that allows “outsiders to apply for a Chengdu hukou,” a clause that has many worried that benefits will be stretched thin by an influx of non-Chengdunese.

Chengdu officials make a point of saying that under the new system, all distinctions between urban and rural hukou are abolished, which means urbanites can also move to the countryside and buy land, farm and in effect “trade classes”. Instead of inspiring urbanites to consider life on the farm, statements like these only fuel farmers’ concerns that the whole hukou reform thing is just another land grab.

A Long Time Coming

Hukou reform has been on the agenda for years.

Chinese hukou
Holding up a "Household Register" hukou booklet

In 2007, a China Daily article remarked that the hukou “has become neither scientific nor rational given the irresistible trend of migration” and just a few months ago, Professor Kam Wing Chan of the University of Washington wrote a post for the East Asia Forum that gathered a lot of the snippets about hukou reform from around the Chinese media, including a joint appeal for serious reform from several provinces.

And in this response to Chengdu’s pilot program, the authors argue that the hukou has actually contributed more to inequality, poverty and suffering than anything else, stating: “The best hukou system is no hukou system.” There is even an English-language blog, Hukou Reform, that tracks the progress China has made thus far in abolishing this arcane system of control.

Without the hukou, people will be able to move freely and shed their previous class distinction and assume another based on their own desires. In the West, we take this freedom for granted, but in China moving to another city has always been a huge deal because all of the basic social services that ensured a retirement in relative peace and quiet were based on one’s hukou. Mobility — legal mobility — does not only present many economic opportunties but also social issues as well:

As mentioned above, many city dwellers who have voiced their opinions online fear an even greater influx of farmers which means a greater strain on traffic, housing, government services, education etc. Will there be a measurable move out to the countryside? Will people pack up and move en masse to the city? Or will people basically stay as they are and just apply for the new benefits? Can farmers even afford to buy in to the urban insurance options? Will this only affect those farmers who have already left the land behind and can now officially become the urban resident they were  “pretending” to be since they came here years ago to work?

Although it is clear that the hukou system as a tool of social control is obsolete, the impact of “hukou re-unification” is much more difficult to discern. The problems lie not just in the system, but in China’s underdeveloped insurance industry, irrevocably corrupted lower levels of government and the deep class divisions that permeate the society.

Perhaps Chengdu’s pilot program is a step toward social reconciliation, itself the first step toward a measure of equality in any society.

This post was authored by Sascha, an American writer living in Shanghai who’s lived in Chengdu for 10 years.

28 thoughts on “Chengdu’s Pilot Program to Abolish the Hukou”

  1. Would this not mean that major cities will be overrun with rural farmers soon, with Chengdu to start? What happens in places like Shenzhen, Beijing and Shanghai if this comes to fruition?

  2. Hi Larry

    Beijing, Shenzhen and a few other cities have already taken a stab at reforming the hukou system and integrating migrant workers … but so far no one city has figured out the perfect option.

    Farmers and urbanite both have come to distrust the government so much that any action whatsoever is met with extreme caution and often resistance …

  3. I was talking to an Indian guy when I visited Bangalore (India’s IT hub) and he was telling me that he thought India needed a hu kou system to stop the waves of people flooding into boom towns like Hyderabad. Interestngly, a friend was telling me that the new Foxconn plant in Chengdu will employ 100,000 (!). I wonder if there’s any connection b/w the Chengdu hu kou policy and Foxconn’s decision to invest here…

    • 100,000 at the Foxconn plant in Chengdu? Wow. I heard it’s already in operation. I’ve been trying to figure out how to get inside there to write about what it’s like. It’s not easy after the suicides.

  4. Excellent post! Really enjoy reading about contemporary sociological issues in China. Glad to hear about progressive thinking in Chengdu, I hope these new reforms will bring about greater social equality. Bridging the urban/rural gap is no simple task.

  5. yeah its kind if a big deal: the breakdown of the system that kept Chinese under control for 60 years … might turn out to be one of those things mentioned in history books more prominently than in the daily media …

    @Tiger, thats a very interesting thought about India “needing a hukou” — might be a good comparative study there somewhere … I’ll see what I can find out about Foxconn …

  6. Even in developed cities accelerated population growth can cause serious problems. For example, my home city of Melbourne has a chronic housing shortage. Terrible shit like students sleeping in garages and slumlords increasing rents by 25% is not unusual…the infrastructure just can’t handle it.

    • Hopefully Chengdu can manage. One thing I really like about this city – as opposed to other highly populated cities in China – is that it’s not ridden with beggars and poverty. They’ve really done a good job cleaning up Chengdu over the past few years and Chongqing is on the same path. I suspect that they know what they’re doing, but it sounds like we’ll know for sure before long.

  7. if these reforms actually work, then farmers will have access to the same benefits that urbanites enjoy, without having to leave the countryside. the imbalance is the very issue the government is trying to change — if that imbalance is fixed, then why would farmers want to go to the city?

  8. Pingback: Chengdu’s pilot program to abolish the hukou
    • Hey Sascha, I’d be careful with that article from the Daily Bell. It seems to me that it is another unsolicited doomsday scenario from uninformed China observers. They are using so-called ‘free-market’ analysis and applying it to a real estate market that is centrally controlled. American economic analysts have no right to predict the collapse of China given that it was the free market ideology itself that created the endless sprawl of cheap tract homes in the U.S. which eventually became indicative of the housing bust and subsequent recession.

      • wassup Adam, glad you stopped by … the doomsday part of that article doesn’t appeal to me as much as the idea of urbanization or bust being the major catalyst for hukou reform, not the righteous crusade against equality that the government is trying to sell so thats what that link is about for me — and the link to the Chongqing story above is meant to show that farmers are not as dense as city slickers might think they are …

        would love to read your thoughts on this somewhere 😉

        • Call me an optimist, but I don’t think a ‘bust’ is necessary for the hukou system to be reformed. Continued successful urbanization means that it MUST be reformed for cities to meet their growth projections.

          You are correct, the farmers are not stupid, and until they get a good deal in opting for an urban hukou, they will continue to have one foot in the big city and one foot in the farm. I think China’s urban leaders are also not stupid, and they know that if economic growth is to be maintained that their permanent populations need to increase.

          It’s a risky game, but China cannot afford to halt economic growth or urbanization (they go hand in hand). China’s economy is not a static system, but rather an ever-evolving one. Hukou reform is another important part of this evolution.

  9. if these reforms actually work, then farmers will have access to the same benefits that urbanites enjoy, without having to leave the countryside. the imbalance is the very issue the government is trying to change — if that imbalance is fixed, then why would farmers want to go to the city?

  10. Great post. I think the hukou system needs to be substituted for some other measures that are more fair for everyone.

    I can’t help but thinking of a new problem that may come after the reforms, though… if farmers finally get a good deal and many of them decide to leave the countryside, won’t it trigger the feared alimentary crisis? In other words, when there’s no rice, what are urbanites going to live on? Will everyone be able to afford imported food? I think China is already importing soya and rice from somewhere else (paradoxically)…

  11. Great post! Sorry I’m a bit late with this comment. Anyways I’m thinking the reform of the Hukou system will really start gaining momentum after the March meeting of the NPC and the adoption of the 12th 5 year plan. Reorienting the economy towards serious domestic consumption will quicken/require the continued rapid urbanization, and will necessitate reforms like the Chengdu one. I don’t think we’re likely to see the complete breakdown of the system for the next 10 years, but certainly with in the large municipalities I think you’ll see reforms similar to this. Maybe someone has a better idea of the statistics, but what percentage of the rural population actually lives within the large municipalities nationwide?

  12. Pingback: Chengdu and Chongqing Leading the Way in Hukou Reform | China Urban Development Blog

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